Keep or cancel an unneeded credit card?
I recently got a credit card through my bank that is superior to the one I was using previously (the first one was a secured credit card that I used while I was establishing my credit history).
My question is whether I should cancel the first account or keep it in case of an emergency. Can either option affect my credit score/report? Are there any other potential side-effects I should be aware about related to either choice of action?
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Keep it if there is no annual fee attached to that card. Yes, closing a credit card can affect your credit score as it decreases the amount of liquid assets available to you.
Yes, cancelling the credit card can affect your credit history negatively, if it was your oldest credit card.
The length of time you've been using credit is one metric that is used to calculate your credit score. I agree with Alexey - keep it if there's no annual fee.
I would say cancel it, but going through the answers already given, I would say that this is a very local answer. Where I live, people having 10 cc are usually in very serious financial problems, where paying of one credit card is done with the others.
I am using a credit card (as most of my peers) as an alternative form of paying. All payments are taken from my bankaccount in the same month. CC companies encourage payments by cc by offering insurances on goods paid with that cc. The interest rates cc companies ask, are often so high that in case you need a loan you are better of taking that loan directly from the bank. My position on credit cards is that they are very interesting tools in doing payments, but refrain from using it as a loan.
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